U.S. builders’ outlook stays weak

Industry hopeful orders will pick up later this year

By PAUL WISEMAN
the associated press

Published: April 15, 2014;Last modified: April 15, 2014 07:12PM

WASHINGTON — U.S. homebuilders’ confidence in the housing market rose modestly in April but remained at low levels for the third straight month, constrained in part by the economy, tight credit for homebuyers and a shortage of workers and available land.

The National Association of Home Builders/Wells Fargo builder sentiment index, which measures confidence in the single-family home market, edged up to 47 in April from 46 in March, the homebuilders group reported Tuesday.

Readings below 50 mean builders view sales conditions as poor. The index had been above 50 from June through January.

Though new homes represent only a fraction of the housing market, they have an outsized impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the homebuilders association.

The latest reading, based on responses from 301 builders, comes as the spring home-selling season gets going. The season typically sets the pattern for residential hiring and building construction in the ensuing months. The overall confidence index was below 50 in all four regions of the United States — 36 in the Northeast, 45 in the West and 48 in the Midwest and South.

“Builder confidence has been in a holding pattern the past three months,” said Kevin Kelly, chairman of the homebuilders association and a developer from Wilmington, Del.

One bright spot, Kelly noted: “Looking ahead, as the spring home-buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead.”